School Bus Contractors

Michael Ely Named Contractor of the Year

When Michael Ely discovered that an educational services commission (ESC) in New Jersey was negotiating with school districts to provide service with its own buses instead of putting routes out for bid, he didn’t just complain — he helped get a law passed that would prevent it from happening again.

“We started losing transportation contracts, and we took notice,” says Ely, president of Scholastic Bus Co. in Hillsdale, N.J., who got the legislation passed as part of the Garden State School Bus Contractors Association. “The ESC was making a great deal of money on the school transportation business. They were receiving annual renewal increases of up to twice the CPI [consumer price index]. We felt we needed to change the legislation.”

Signed into law in May, Senate Bill 1298 requires public entities to play by the same rules as private school bus companies when bidding on school transportation contracts. They now must go through the same public bidding process as private companies and are no longer exempt from the bonding or disclosure requirements of private contractors. In addition, they will be held to the same CPI increases as private contractors, helping to eliminate the practice of negotiating a low price for the first year and then demanding substantial increases at renewal.

For his contributions to the industry, Ely received SCHOOL BUS FLEET’s Contractor of the Year award at the National School Transportation Association’s 41st annual convention in Washington, D.C. He is the 38th recipient of the award.

A team effort With the passage of SB 1298, New Jersey becomes the first state with this type of legislation passed, something that pleases Ely. “I’m hoping other states will emulate what we’ve done,” he says.

Ely credits its passage to “the right people working on it and the right legislation promoting it” and the fact that the legislation stresses the advantages to New Jersey taxpayers of having an open bidding process and public accountability. “It doesn’t benefit contractors,” he says. “It just allows them to compete.”

Operational challenges For Scholastic Bus, safety is the family-owned operation’s greatest strength, Ely says. It is now helping to push for a standardized curriculum in the state to help ensure greater safety by all operators.

The company is also testing GPS on five of its buses to further passenger and driver safety. If the pilot is successful, Ely says the systems will be installed on the entire fleet. “The scariest thing in the world is when you have a driver or vehicle that is lost, the driver is unwilling to call in and you have a frantic parent,” he says.

Scholastic was started by Ely’s father in 1961 with five buses. Ely and his brother John now operate 250 buses for 30 customers, transporting 20,000 students daily.

The company has four locations, two each in New Jersey and New York, and 400 part-time drivers. Sixty-five percent of Scholastic’s contracts are in New Jersey.

While the company seems to have no problem retaining employees (some of the administrative and maintenance staff have been there more than 20 years), Ely says he does find it a challenge to recruit drivers. This is especially true since the formerly blue-collar area the operation serves has changed with rising real estate prices. “We have to go into more urban areas,” he says. “We have more terminals so we can tap into those labor markets.”